Ideology

The Labour Party was initially formed as a means for the trade union movement to establish political representation for itself at Westminster. It only gained a 'socialist' commitment with the original party constitution of 1918. That 'socialist' element, the original Clause IV, was seen by its strongest advocates as a straightforward commitment to the "common ownership", or nationalisation, of the "means of production, distribution and exchange". Although about a third of British industry was taken into public ownership after the second world war, and remained so until the 1980s, the right of the party were questioning the validity of expanding on this objective by the late 1950s. Influenced by Anthony Crosland's book, The Future of Socialism (1956), the circle around party leader Hugh Gaitskell felt that the commitment was no longer necessary. While an attempt to remove Clause IV from the party constitution in 1959 failed, Tony Blair, and the 'modernisers' saw the issue as putting off potential voters,[3] and were successful thirty-five years later,[4] with only limited opposition from senior figures in the party.[5]

Party electoral manifestos have not contained the term socialism since 1992. The new version of Clause IV, although still affirming a commitment to democratic socialism,[6][7] no longer mention the public ownership of industry: In its place it advocates "the enterprise of the market and the rigour of competition" with "high quality public services" not necessarily themselves in the public sector.[8]

Historically, influenced by Keynesian economics, the party favoured government intervention in the economy, and the redistribution of wealth. Taxation was seen as a means to achieve a "major redistribution of wealth and income" in the October 1974 election manifesto.[9] The party also desired increased rights for workers, and a welfare state including publicly funded healthcare.

From the late-1980s onwards, the party has adopted free market policies,[10] leading many observers to describe the Labour Party as social democratic[11][12][13][14] or the Third Way, rather than democratic socialist.[12][13][15][16][17] Other commentators go further and argue that traditional social democratic parties across Europe, including the British Labour Party, have been so deeply transformed in recent years that it is no longer possible to describe them ideologically as 'social democratic',[18] and claim that this ideological shift has put new strains on the party's traditional relationship with the trade unions.[19][20][21][22]

Symbols

The red flag, originally the official flag and symbol of the Labour party

Labour has long been identified with red, a political colour traditionally affiliated with socialism and the labour movement. The party conference in 1931 passed a motion "That this conference adopts Party Colours, which should be uniform throughout the country, colours to be red and gold".[23] Since the party's inception, the red flag has been Labour's official symbol; the flag has been associated with socialism and revolution ever since the 1789 French Revolution and the revolutions of 1848. The red rose, a symbol of social democracy, was adopted as the party symbol in 1986 as part of a rebranding exercise and is now incorporated into the party logo.[24]

The red flag became an inspiration which resulted in the composition of "The Red Flag", the official party anthem since its inception, being sung at the end of party conferences and on various occasions such as in parliament on February 2006 to mark the centenary of the Labour Party’s founding. During New Labour attempts were made to play down the role of the song,[25][26] however it still remains to be used.[27]

The party's decision-making bodies on a national level formally include the National Executive Committee (NEC), Labour Party Conference and National Policy Forum (NPF)—although in practice the Parliamentary leadership has the final say on policy. The 2008 Labour Party Conference was the first at which affiliated trade unions and Constituency Labour Parties did not have the right to submit motions on contemporary issues that would previously have been debated.[28] Labour Party conferences now include more "keynote" addresses, guest speakers and question-and-answer sessions, while specific discussion of policy now takes place in the National Policy Forum.

Executive Board

On 9 March 2012 the Labour Party announced its new senior management team[29]

Chris Lennie, continues his role in assisting the development of external relations and fundraising.

Membership

The party had 193,961 members on 31 December 2010 according to accounts filed with the Electoral Commission, which was up from 156,205 the previous year. In that year it had an income of about £36 million (£4.9 million from membership fees) and expenditure of about £34 million, high due to that year's general election.[31]

For many years Labour held to a policy of not allowing residents of Northern Ireland to apply for membership,[32] instead supporting the Social Democratic and Labour Party (SDLP) which informally takes the Labour whip in the House of Commons.[33] The 2003 Labour Party Conference accepted legal advice that the party could not continue to prohibit residents of the province joining,[34] and whilst the National Executive has established a regional constituency party it has not yet agreed to contest elections there.

As it was founded by the unions to represent the interests of working-class people, Labour's link with the unions has always been a defining characteristic of the party. In recent years this link has come under increasing strain, with the RMT being expelled from the party in 2004 for allowing its branches in Scotland to affiliate to the left-wing Scottish Socialist Party.[36] Other unions have also faced calls from members to reduce financial support for the Party[37] and seek more effective political representation for their views on privatisation, public spending cuts and the anti-trade union laws.[38] Unison and GMB have both threatened to withdraw funding from constituency MPs and Dave Prentis of UNISON has warned that the union will write "no more blank cheques" and is dissatisfied with "feeding the hand that bites us".[39] Union funding was redesigned in 2013 after the Falkirk candidate-selection controversy.[40]

History

Founding

The Labour Party's origins lie in the late 19th century, around which time it became apparent that there was a need for a new political party to represent the interests and needs of the urban proletariat, a demographic which had increased in number and had recently been given franchise.[48] Some members of the trades union movement became interested in moving into the political field, and after further extensions of the voting franchise in 1867 and 1885, the Liberal Party endorsed some trade-union sponsored candidates. The first Lib–Lab candidate to stand was George Odger in the Southwark by-election of 1870. In addition, several small socialist groups had formed around this time, with the intention of linking the movement to political policies. Among these were the Independent Labour Party, the intellectual and largely middle-class Fabian Society, the Marxist Social Democratic Federation[49] and the Scottish Labour Party.

In the 1895 general election, the Independent Labour Party put up 28 candidates but won only 44,325 votes. Keir Hardie, the leader of the party, believed that to obtain success in parliamentary elections, it would be necessary to join with other left-wing groups. Hardie's roots as a lay preacher contributed to an ethos in the party which led to the comment by 1950s General Secretary Morgan Phillips that "Socialism in Britain owed more to Methodism than Marx".[50]

Labour Representation Committee

In 1899, a Doncaster member of the Amalgamated Society of Railway Servants, Thomas R. Steels, proposed in his union branch that the Trade Union Congress call a special conference to bring together all left-wing organisations and form them into a single body that would sponsor Parliamentary candidates. The motion was passed at all stages by the TUC, and the proposed conference was held at the Memorial Hall on Farringdon Street on 26 and 27 February 1900. The meeting was attended by a broad spectrum of working-class and left-wing organisations — trades unions represented about one third of the membership of the TUC delegates.[51]

After a debate, the 129 delegates passed Hardie's motion to establish "a distinct Labour group in Parliament, who shall have their own whips, and agree upon their policy, which must embrace a readiness to cooperate with any party which for the time being may be engaged in promoting legislation in the direct interests of labour." This created an association called the Labour Representation Committee (LRC), meant to coordinate attempts to support MPs sponsored by trade unions and represent the working-class population.[52] It had no single leader, and in the absence of one, the Independent Labour Party nominee Ramsay MacDonald was elected as Secretary. He had the difficult task of keeping the various strands of opinions in the LRC united. The October 1900 "Khaki election" came too soon for the new party to campaign effectively; total expenses for the election only came to £33.[53] Only 15 candidatures were sponsored, but two were successful; Keir Hardie in Merthyr Tydfil and Richard Bell in Derby.[54]

Support for the LRC was boosted by the 1901 Taff Vale Case, a dispute between strikers and a railway company that ended with the union being ordered to pay £23,000 damages for a strike. The judgement effectively made strikes illegal since employers could recoup the cost of lost business from the unions. The apparent acquiescence of the Conservative Government of Arthur Balfour to industrial and business interests (traditionally the allies of the Liberal Party in opposition to the Conservative's landed interests) intensified support for the LRC against a government that appeared to have little concern for the industrial proletariat and its problems.[54]

In their first meeting after the election the group's Members of Parliament decided to adopt the name "The Labour Party" formally (15 February 1906). Keir Hardie, who had taken a leading role in getting the party established, was elected as Chairman of the Parliamentary Labour Party (in effect, the Leader), although only by one vote over David Shackleton after several ballots. In the party's early years the Independent Labour Party (ILP) provided much of its activist base as the party did not have individual membership until 1918 but operated as a conglomerate of affiliated bodies. The Fabian Society provided much of the intellectual stimulus for the party. One of the first acts of the new Liberal Government was to reverse the Taff Vale judgement.[54]

Early years and rise

The 1910 election saw 42 Labour MPs elected to the House of Commons, a significant victory since, a year before the election, the House of Lords had passed the Osborne judgment ruling that Trades Unions in the United Kingdom could no longer donate money to fund the election campaigns and wages of Labour MPs. The governing Liberals were unwilling to repeal this judicial decision with primary legislation. The height of Liberal compromise was to introduce a wage for Members of Parliament to remove the need to involve the Trade Unions. By 1913, faced with the opposition of the largest Trades Unions, the Liberal government passed the Trade Disputes Act to allow Trade Unions to fund Labour MPs once more.

During the First World War the Labour Party split between supporters and opponents of the conflict but opposition to the war grew within the party as time went on. Ramsay MacDonald, a notable anti-war campaigner, resigned as leader of the Parliamentary Labour Party and Arthur Henderson became the main figure of authority within the party. He was soon accepted into Prime Minister Asquith's war cabinet, becoming the first Labour Party member to serve in government.

Arthur Henderson resigned from the Cabinet in 1917 amid calls for party unity to be replaced by George Barnes. The growth in Labour's local activist base and organisation was reflected in the elections following the war, the co-operative movement now providing its own resources to the Co-operative Party after the armistice. The Co-operative Party later reached an electoral agreement with the Labour Party.

With the Representation of the People Act 1918, almost all adult men (excepting only peers, criminals and lunatics) and most women over the age of thirty were given the right to vote, almost tripling the British electorate at a stroke, from 7.7 million in 1912 to 21.4 million in 1918. This set the scene for a surge in Labour representation in parliament.[57]

The Communist Party of Great Britain was refused affiliation to the Labour Party between 1921 and 1923.[58] Meanwhile, the Liberal Party declined rapidly, and the party also suffered a catastrophic split which allowed the Labour Party to gain much of the Liberals' support. With the Liberals thus in disarray, Labour won 142 seats in 1922, making it the second largest political group in the House of Commons and the official opposition to the Conservative government. After the election the now-rehabilitated Ramsay MacDonald was voted the first official leader of the Labour Party.

First Labour government, 1924

The 1923 general election was fought on the Conservatives' protectionist proposals but, although they got the most votes and remained the largest party, they lost their majority in parliament, necessitating the formation of a government supporting free trade. Thus, with the acquiescence of Asquith's Liberals, Ramsay MacDonald became the first ever Labour Prime Minister in January 1924, forming the first Labour government, despite Labour only having 191 MPs (less than a third of the House of Commons).

Because the government had to rely on the support of the Liberals it was unable to get any socialist legislation passed by the House of Commons. The only significant measure was the Wheatley Housing Act, which began a building programme of 500,000 homes for rental to working-class families. Legislation on education, unemployment and social insurance were also passed.

While there were no major labour strikes during his term, MacDonald acted swiftly to end those that did erupt. When the Labour Party executive criticized the government, he replied that, "public doles, Poplarism [local defiance of the national government], strikes for increased wages, limitation of output, not only are not Socialism, but may mislead the spirit and policy of the Socialist movement."[59]

The government collapsed after only nine months when the Liberals voted for a Select Committee inquiry into the Campbell Case, a vote which MacDonald had declared to be a vote of confidence. The ensuing general election saw the publication, four days before polling day, of the Zinoviev letter, in which Moscow talked about a Communist revolution in Britain. The letter had little impact on the Labour vote—which held up. It was the collapse of the Liberal party that led to the Conservative landslide. The Conservatives were returned to power although Labour increased its vote from 30.7% to a third of the popular vote, most Conservative gains being at the expense of the Liberals. However many Labourites for years blamed their defeat on foul play (the Zinoviev Letter), thereby according to A. J. P. Taylor misunderstanding the political forces at work and delaying needed reforms in the party.[60][61]

In opposition MacDonald continued his policy of presenting the Labour Party as a moderate force. During the General Strike of 1926 the party opposed the general strike, arguing that the best way to achieve social reforms was through the ballot box. The leaders were also fearful of Communist influence orchestrated from Moscow.[62]

Second Labour government, 1929–31

In the 1929 general election, the Labour Party became the largest in the House of Commons for the first time, with 287 seats and 37.1% of the popular vote. However MacDonald was still reliant on Liberal support to form a minority government. MacDonald went on to appoint Britain's first female cabinet minister, Margaret Bondfield, who was appointed Minister of Labour.

The government, however, soon found itself engulfed in crisis: the Wall Street Crash of 1929 and eventual Great Depression occurred soon after the government came to power, and the crisis hit Britain hard. By the end of 1930 unemployment had doubled to over two and a half million.[63] The government had no effective answers to the crisis. By the summer of 1931 a dispute over whether or not to reduce public spending had split the government. As the economic situation worsened MacDonald agreed to form a "National Government" with the Conservatives and the Liberals.

On 24 August 1931 MacDonald submitted the resignation of his ministers and led a small number of his senior colleagues in forming the National Government together with the other parties. This caused great anger among those within the Labour Party who felt betrayed by MacDonald's actions: he and his supporters were promptly expelled from the Labour Party but went on to form a separate National Labour Organisation, the remaining Labour Party (again led by Arthur Henderson) and a few Liberals going into opposition. The ensuing general election resulted in overwhelming victory for the National Government and disaster for the Labour Party which won only 52 seats, 225 fewer than in 1929.

The party experienced another split in 1932 when the Independent Labour Party, which for some years had been increasingly at odds with the Labour leadership, opted to disaffiliate from the Labour Party and embarked on a long, drawn-out decline.

Lansbury resigned as leader in 1935 after public disagreements over foreign policy. He was promptly replaced as leader by his deputy, Clement Attlee, who would lead the party for two decades. The party experienced a revival in the 1935 general election, winning 154 seats and 38% of the popular vote, the highest that Labour had achieved.

Post-war victory under Attlee and major reforms, 1945–51

At the end of the war in Europe, in May 1945, Labour resolved not to repeat the Liberals' error of 1918, and promptly withdrew from government, on trade union insistence, to contest the 1945 general election in opposition to Churchill's Conservatives. Surprising many observers,[64] Labour won a formidable victory, winning just under 50% of the vote with a majority of 159 seats.[65]

Clement Attlee's proved one of the most radical British governments of the 20th century, enacting Keynesian economic policies, presiding over a policy of nationalising major industries and utilities including the Bank of England, coal mining, the steel industry, electricity, gas, and inland transport (including railways, road haulage and canals). It developed and implemented the "cradle to grave" welfare state conceived by the economist William Beveridge. To this day, the party considers the 1948 creation of Britain's publicly funded National Health Service (NHS) under health minister Aneurin Bevan its proudest achievement.[66] Attlee's government also began the process of dismantling the British Empire when it granted independence to India and Pakistan in 1947, followed by Burma (Myanmar) and Ceylon (Sri Lanka) the following year. At a secret meeting in January 1947, Attlee and six cabinet ministers, including Foreign Secretary Ernest Bevin, decided to proceed with the development of Britain's nuclear weapons programme,[63] in opposition to the pacifist and anti-nuclear stances of a large element inside the Labour Party.

Labour went on to win the 1950 general election, but with a much reduced majority of five seats. Soon afterwards, defence became a divisive issue within the party, especially defence spending (which reached a peak of 14% of GDP in 1951 during the Korean War),[67] straining public finances and forcing savings elsewhere. The Chancellor of the Exchequer, Hugh Gaitskell, introduced charges for NHS dentures and spectacles, causing Bevan, along with Harold Wilson (then President of the Board of Trade), to resign over the dilution of the principle of free treatment on which the NHS had been established.

In the 1951 general election, Labour narrowly lost to the Conservatives despite receiving the larger share of the popular vote, its highest ever vote numerically. Most of the changes introduced by the 1945–51 Labour government were accepted by the Conservatives and became part of the "post-war consensus" that lasted until the late 1970s. Food and clothing rationing, however, still in place since the war, were swiftly relaxed, then abandoned from about 1953.

In opposition, 1950s

Following the defeat of 1951, the party underwent a long period of 13 years in opposition. The party suffered an ideological split during the 1950s, while the postwar economic recovery, given[clarification needed] the social effects of Attlee's reforms, made the public broadly content with the Conservative governments of the time. Attlee remained as leader until his retirement in 1955.

His replacement, Hugh Gaitskell, associated with the right wing of the party, struggled in dealing with internal party divisions in the late 1950s and early 1960s and Labour lost the 1959 general election. In 1963, Gaitskell's sudden death from a heart attack made way for Harold Wilson to lead the party.

Labour in government under Wilson, 1964–70

A downturn in the economy along with a series of scandals in the early 1960s (the most notorious being the Profumo affair) engulfed the Conservative government by 1963. The Labour Party returned to government with a 4-seat majority under Wilson in the 1964 election but increased its majority to 96 in the 1966 election.

Wilson's government was responsible for a number of sweeping social and educational reforms under the leadership of Home SecretaryRoy Jenkins, such as the abolishment of the death penalty in 1964, the legalisation of abortion and homosexuality (initially only for men aged 21 or over, and only in England and Wales) in 1967 and the abolition of theatre censorship in the following year. The 1960s Labour government also expanded comprehensive education and created the Open University. But Wilson's government had inherited a large trade deficit that led to a currency crisis and an ultimately doomed attempt to stave off devaluation of the pound. Labour went on to lose the 1970 election to the Conservatives under Edward Heath.

In opposition, 1970–74

After losing the 1970 general election, Labour returned to opposition, but retained Harold Wilson as Leader. Heath's government soon ran into trouble over Northern Ireland and a dispute with miners in 1973 which led to the "three-day week". The 1970s proved a difficult time to be in government for both the Conservatives and Labour due to the 1973 oil crisis which caused high inflation and a global recession. The Labour Party was returned to power again under Wilson a few weeks after the February 1974 general election, forming a minority government with the support of the Ulster Unionists. The Conservatives were unable to form a government as they had fewer seats despite receiving more votes numerically. It was the first general election since 1924 in which both main parties had received less than 40% of the popular vote and the first of six successive general elections in which Labour failed to reach 40% of the popular vote. In a bid to gain a proper majority, a second election was soon called for October 1974 in which Labour, still with Harold Wilson as leader, managed a majority of three, gaining just 18 seats and taking its total to 319.

Return to government, 1974–79

For much of its time in office the Labour government struggled with serious economic problems and a precarious majority in the Commons, while the party's internal dissent over Britain's membership of the European Economic Community (EEC), which Britain had entered under Edward Heath in 1972, led in 1975 to a national referendum on the issue in which two thirds of the public supported continued membership.

Harold Wilson's personal popularity remained reasonably high but he unexpectedly resigned as Prime Minister in 1976, citing health reasons and was replaced by James Callaghan. The Wilson and Callaghan governments of the 1970s tried to control inflation (which reached 23.7% in 1975[68]) by a policy of wage restraint. This was fairly successful, reducing inflation to 7.4% by 1978.[54][68] However it led to increasingly strained relations between the government and the trade unions.

Fear of advances by the nationalist parties, particularly in Scotland, led to the suppression of a report from Scottish Office economist Gavin McCrone that suggested that an independent Scotland would be 'chronically in surplus'.[69] By 1977 by-election losses and defections to the breakaway Scottish Labour Party left Callaghan heading a minority government, forced to trade with smaller parties in order to govern. An arrangement negotiated in 1977 with Liberal leader David Steel, known as the Lib-Lab Pact, ended after one year. After this deals were forged with various small parties including the Scottish National Party and the Welsh nationalist Plaid Cymru, prolonging the life of the government slightly.

The nationalist parties, in turn, demanded devolution to their respective constituent countries in return for their supporting the government. When referendums for Scottish and Welsh devolution were held in March 1979 Welsh devolution was rejected outright while the Scottish referendum returned a narrow majority in favour without reaching the required threshold of 40% support. When the Labour government duly refused to push ahead with setting up the proposed Scottish Assembly, the SNP withdrew its support for the government: this finally brought the government down as it triggered a vote of confidence in Callaghan's government that was lost by a single vote on 28 March 1979, necessitating a general election.

Callaghan had been widely expected to call a general election in the autumn of 1978 when most opinion polls showed Labour to have a narrow lead.[54] However he decided to extend his wage restraint policy for another year hoping that the economy would be in a better shape for a 1979 election. But during the winter of 1978–79 there were widespread strikes among lorry drivers, railway workers, car workers and local government and hospital workers in favour of higher pay-rises that caused significant disruption to everyday life. These events came to be dubbed the "Winter of Discontent".

In the 1979 election Labour suffered electoral defeat by the Conservatives, now led by Margaret Thatcher. The number of people voting Labour hardly changed between February 1974 and 1979 but in 1979 the Conservative Party achieved big increases in support in the Midlands and South of England, benefiting from both a surge in turnout and votes lost by the ailing Liberals.

"Wilderness Years", 1979–97

After its defeat in the 1979 election the Labour Party underwent a period of internal rivalry between the left-wing, represented by Tony Benn, and the right-wing represented by Denis Healey. The election of Michael Foot as leader in 1980, and the left policies they opposed, led in 1981 to four former cabinet ministers from the right of the Labour Party (Shirley Williams, William Rodgers, Roy Jenkins and David Owen) forming the Social Democratic Party. Benn was only narrowly defeated by Healey in a subsequent deputy leadership election after the introduction of an electoral college intended to widen the voting franchise to elect the leader and their deputy. By 1982, the National Executive Committee had concluded that the entryistMilitant group were in contravention of the party's constitution. The Militant newspaper's five member editorial board were expelled on 22 February 1983.

The Labour Party was defeated heavily in the 1983 general election, winning only 27.6% of the vote, its lowest share since 1918, and receiving only half a million votes more than the SDP-Liberal Alliance who leader Michael Foot condemned for "siphoning" Labour support and enabling the Conservatives to greatly increase their majority of parliamentary seats.[70]

Foot resigned and was replaced as leader by Neil Kinnock, with Roy Hattersley as his deputy. The election results were announced on 2 October 1983 and the leadership progressively dropped unpopular policies. The miners strike of 1984–85 over coal mine closures, for which miners' leader Arthur Scargill was blamed, and the Wapping dispute led to clashes with the left of the party, and negative coverage in most of the press. Tabloid vilification of the so-called loony left continued to taint the parliamentary party by association from the activities of 'extra-parliamentary' militants in local government.

Labour improved its performance in 1987, gaining 20 seats and so reducing the Conservative majority from 143 to 102. They were now firmly re-established as the second political party in Britain as the Alliance had once again failed to make a breakthrough with seats. A merger of the SDP and Liberals occurred, eventually emerging as the Liberal Democrats. Following the 1987 election, the National Executive Committee resumed disciplinary action against members of Militant, who remained in the party, leading to further expulsions of their activists and the two MPs who supported the group.

In November 1990 following a contested leadership election, Margaret Thatcher resigned as leader of the Conservative Party and was succeeded as leader and Prime Minister by John Major. Most opinion polls had shown Labour comfortably ahead of the Tories for more than a year before Mrs Thatcher's resignation, with the fall in Tory support blamed largely on her introduction of the unpopular poll tax, combined with the fact that the economy was sliding into recession at the time.

Labour Party logo under Kinnock, Smith and Blair's leaderships

The change of leader in the Tory government saw a turnaround in support for the Tories, who regularly topped the opinion polls throughout 1991 although Labour regained the lead more than once.

The "yo yo" in the opinion polls continued into 1992, though after November 1990 any Labour lead in the polls was rarely sufficient for a majority. Major resisted Kinnock's calls for a general election throughout 1991. Kinnock campaigned on the theme "It's Time for a Change", urging voters to elect a new government after more than a decade of unbroken Conservative rule. However, the Conservatives themselves had undergone a dramatic change in the change of leader from Thatcher to Major, at least in terms of style if not substance. From the outset, it was clearly a well-received change, as Labour's 14-point lead in the November 1990 "Poll of Polls" was replaced by an 8% Tory lead a month later.

The election on 9 April 1992 was widely tipped to result in a hung parliament or a narrow Labour majority, but in the event the Conservatives were returned to power, though with a much reduced majority of 21 in 1992.[72] Despite the increased number of seats and votes, it was still an incredibly disappointing result for supporters of the Labour party. For the first time in over 30 years there was serious doubt among the public and the media as to whether Labour could ever return to government.

Kinnock then resigned as leader and was replaced by John Smith. Smith's leadership once again saw the re-emergence of tension between those on the party's left and those identified as "modernisers", both of whom advocated radical revisions of the party's stance albeit in different ways. At the 1993 conference, Smith successfully changed the party rules and lessened the influence of the trade unions on the selection of candidates to stand for Parliament by introducing a one member, one vote system called "OMOV" — but only barely, after a barnstorming speech by John Prescott which required Smith to compromise on other individual negotiations.

The Black Wednesday economic disaster in September 1992 left the Conservative government's reputation for monetary excellence in tatters, and by the end of that year Labour had a comfortable lead over the Tories in the opinion polls. Although the recession was declared over in April 1993 and a period of strong and sustained economic growth followed, coupled with a relatively swift fall in unemployment, the Labour lead in the opinion polls remained strong. However, Smith died from a heart attack in May 1994.[73]

"New Labour" – in government, 1997–2010

Tony Blair continued to move the party further to the centre, abandoning the largely symbolic Clause Four at the 1995 mini-conference in a strategy to increase the party's appeal to "middle England". More than a simple re-branding, however, the project would draw upon the Third Way strategy, informed by the thoughts of the British sociologist Anthony Giddens.

"New Labour" was first termed as an alternative branding for the Labour Party, dating from a conference slogan first used by the Labour Party in 1994, which was later seen in a draft manifesto published by the party in 1996, called New Labour, New Life For Britain. It was a continuation of the trend that had begun under the leadership of Neil Kinnock. "New Labour" as a name has no official status, but remains in common use to distinguish modernisers from those holding to more traditional positions, normally referred to as "Old Labour".

'New Labour is a party of ideas and ideals but not of outdated ideology. What counts is what works. The objectives are radical. The means will be modern.'[74]

The Labour Party won the 1997 general election with a landslide majority of 179; it was the largest Labour majority ever, and the largest swing to a political party achieved since 1945. Over the next decade, a wide range of progressive social reforms were enacted,[75][76] with millions lifted out of poverty during Labour's time in office largely as a result of various tax and benefit reforms.[77][78][79]

Among the early acts of Blair's government were the establishment of the national minimum wage, the devolution of power to Scotland, Wales and Northern Ireland, and the re-creation of a city-wide government body for London, the Greater London Authority, with its own elected-Mayor. Combined with a Conservative opposition that had yet to organise effectively under William Hague, and the continuing popularity of Blair, Labour went on to win the 2001 election with a similar majority, dubbed the "quiet landslide" by the media.[80]

A perceived turning point was when Blair controversially allied himself with US President George W. Bush in supporting the Iraq War, which caused him to lose much of his political support.[81] The UN Secretary-General, among many, considered the war illegal.[82] The Iraq War was deeply unpopular in most western countries, with Western governments divided in their support[83] and under pressure from worldwide popular protests. At the 2005 election, Labour was re-elected for a third term, but with a reduced majority of 66. The decisions that led up to the Iraq war and its subsequent conduct are currently the subject of Sir John Chilcot'sIraq Inquiry.

Blair announced in September 2006 that he would quit as leader within the year, though he had been under pressure to quit earlier than May 2007 in order to get a new leader in place before the May elections which were expected to be disastrous for Labour.[84] In the event, the party did lose power in Scotland to a minority Scottish National Party government at the 2007 elections and, shortly after this, Blair resigned as Prime Minister and was replaced by his Chancellor, Gordon Brown. Although the party experienced a brief rise in the polls after this, its popularity soon slumped to its lowest level since the days of Michael Foot. During May 2008, Labour suffered heavy defeats in the London mayoral election, local elections and the loss in the Crewe and Nantwich by-election, culminating in the party registering its worst ever opinion poll result since records began in 1943, of 23%, with many citing Brown's leadership as a key factor.[85] Membership of the party also reached a low ebb, falling to 156,205 by the end of 2009: over 40 per cent of the 405,000 peak reached in 1997 and thought to be the lowest total since the party was founded.[86][87][88]

Finance proved a major problem for the Labour Party during this period; a "cash for peerages" scandal under Blair resulted in the drying up of many major sources of donations. Declining party membership, partially due to the reduction of activists' influence upon policy-making under the reforms of Neil Kinnock and Blair, also contributed to financial problems. Between January and March 2008, the Labour Party received just over £3 million in donations and were £17 million in debt; compared to the Conservatives' £6 million in donations and £12 million in debt.[89]

In the 2010 general election on 6 May that year, Labour with 29.0% of the vote won the second largest number of seats (258). The Conservatives with 36.5% of the vote won the largest number of seats (307), but no party had an overall majority, meaning that Labour could still remain in power if they managed to form a coalition with at least one smaller party.[90] However, the Labour Party would have had to form a coalition with more than one other smaller party to gain an overall majority; anything less would result in a minority government.[91] On 10 May 2010, after talks to form a coalition with the Liberal Democrats broke down, Brown announced his intention to stand down as Leader before the Labour Party Conference but a day later resigned as both Prime Minister and party leader.[92]

In September 2010 the party reported a surge of 32,000 new members since the general election;[99] at the end of 2011 this figure had reached 65,000 new members.[100][101]

The party edged out the Conservatives in the May 2014 European parliamentary elections winning 20 seats versus the Conservatives 19. However the UK Independence Party won 24 seats.[102] Labour also won the majority of seats in the local council elections of 2014, gaining 324 more councillors than they had before the election. [103]

Blue Labour

The new leadership of the party has been seeking a coherent ideological position to answer Cameron's "Big Society" rhetoric, and also mark a sea-change from the neoliberal ideology of Blair and "New Labour".

Blue Labour is a recent, and somewhat influential[104] ideological tendency in the party that advocates the belief that working class voters will be won back to Labour through more conservative policies on certain social and international issues, such as immigration and crime,[105] a rejection of neoliberal economics[106] in favour of ideas from guild socialism and continental corporatism,[107] and a switch to local and democratic community management and provision of services,[25] rather than relying on a traditional welfare state that is seen as excessively "bureaucratic".[108] These ideas have been given an endorsement by Ed Miliband who in 2011 wrote the preface to a book expounding Blue Labour's positions.[109] However, it lost some influence after comments by Maurice Glasman in the Telegraph newspaper.[110]

Ed Miliband has himself emphasised "responsible capitalism" and greater state intervention to change the balance of the UK economy away from financial services.[111] Tackling vested interests[112] and opening up closed circles in British society[113] have also been themes that he has returned to a number of times. Miliband has stated that he will increase regulation on banks and the energy companies.[114] Indeed, Miliband, in 2013, stated that he will reform the energy market and use an energy price freeze to give a future Labour government time to do so. Miliband has also suggested policies to ensure that workers are paid a living wage (an amount higher than the current minimum wage), such as offer tax breaks to persuade the private sector to pay the wage as a way to boost productivity and cut welfare bills.[115]

In June 2013, the party's shadow chancellor, Ed Balls, accepted that Labour would use cuts scheduled for 2015–16 by the Conservative-Liberal Democrat coalition as the basis for its own cuts programme.[116] He has also been accused of planning to cut the state pension.[117] These policies have been referred to as the party "abandoning [its] economic case about austerity for what they seem to think is a short-term political advantage".[118]

In September 2014, Ed Balls outlined his plans to cut the deficit, Whereas the Conservatives want a surplus on all government spending, including investment, by 2018/19, Labour wants to balance the current budget, excluding investment, by 2020.[119]

2013 Labour Party Falkirk candidate selection

Eric Joyce, Labour MP for Falkirk, chose to resign from the party after pleading guilty to charges of assault. Though he had already been suspended because of the charge, the resignation forced Labour to begin looking for a new parliamentary candidate for the constituency ahead of the United Kingdom general election, 2015. The process of selecting a candidate was deferred to the party's National Executive Committee in February 2013 due to a suspicion that Unite, a major trade union and a significant financial backer of the party, was registering union members as party members in order to push its favoured candidate.[120]

In June 2013, the party announced that its NEC would be taking direct control of the candidate selection process for Falkirk because of "concern about the legitimacy of members qualifying to participate in the selection of a Westminster candidate".[121] The resultant row has so far caused the suspension of two local party members, the resignation of Deputy Leader Tom Watson MP as Labour's 2015 election strategist, and the forwarding by Ed Miliband of the NEC internal report into the situation to Police Scotland.[122]

The Guardian has reported that the row has led to a former cabinet minister and other "senior party figures" calling for Labour to break its formal links with the trade union movement.[123]

^ ab"Labour Party Rule Book 2008". The Labour Party. Retrieved 12 May 2010. When the party is in opposition and the party leader, for whatever reason, becomes permanently unavailable, the deputy leader shall automatically become party leader on a pro-tem basis.[dead link]